Typically, when a Company Limited by Shares is incorporated, in the Company’s set up docs (eg in the Memorandum/Articles of Association or Constitution) it will say the authorized Share Capital of this Company is X$.
(For those of you who don’t know authorized share capital is) Authorised Share Capital is the amount of capital/money a company can raise by issuing shares. If the maximum authorized share capital of a company is $100,000 then the company can only issue or allocate (eg by private sale) $100,000 worth of shares (eg 100,000 shares of one US Dollar each or 10,000 shares of Ten US dollars each or say 1,000,000 shares of 10 cents each, etc).
If the maximum authorized share capital is $US1,000,000 (1 Mill USD) then a company can issue and sell $1,000,000 worth of shares (eg 1,000,000 shares of one US Dollar each or 100,000 shares of ten US Dollars each etc or ten million shares of 10 cents each).
In theory any shares issued should be fully paid for by the shareholder; Which is why typically when we form a Company, where the client (or a Nominee) is to be the initial shareholder, we only issue one hundred shares to the initial shareholder (ie so as to limit the amount of money you have to commit to, or the amount of money that you will end up owing to, the Company).
If you want to issue more shares you would firstly need to:
- Tell us how many shares and the kind of shares you want issued (and the value of each share) eg Dear OCI Please issue one hundred thousand ordinary shares of $US1 each
- Tell us who these shares are to be issued to
You will also need to provide us with:
A. (if the new shareholder is to be a person) certified copies of the said person’s passport, drivers license, and proof of address document; or
B. if the shareholder is to be a company (all the above info as regards the underlying company owners and natural person shareholders plus) proof of incorporation, registered office address and good standing of the company (and you’d need to tell us, if these shares are to be sold to an outside party, what the agreed sale price is of/for these shares).
Here is what the legal process will look like:
(a) We would need to create and arrange for the Company Director/Chairman to sign a Change of Shareholdings minute/resolution – (we will forward you the draft when you confirm that you wish to proceed).
(b) An application for shares (also known as a Share subscription application) will need to be created by us for signing by the incoming shareholder – (we will forward you the draft share transfer when you confirm that you wish to proceed).
(c) We will also need fees settled in advance. See details below.
Procedures Once Documents Have Been Received
Once our fees have been settled and we have received (a) the original application for shares and (b) an original (or certified copy) of the signed resolution within 3-5 working days we will:
(i) scan and email to you the new share certificate/s; and
(ii) upgrade the Company’s Share register to note the new shareholder’s name; and
(iii) scan and email to you a Lawyer certified true copy of the upgraded Share register; &
(iv) (the same day) package and take the above docs to DHL/Fedex/TNT (or to the post office for airmailing as you may prefer) for despatch by courier to you with the next available flight to your region.
Cost of attending to all the above would be circa $300 per shareholder (depending on the jurisdiction) and payment is required in advance. (Payment can be made by bank transfer or credit card or via Paypal or in Bitcoin).
Please confirm that you wish to proceed (advising of the shareholder details as per paragraphs 1 and 2 above) + advise how you wish to pay and we will send you an invoice for payment.
NOTE: if the amount of shares you propose to issue means that the total amount/value of shares issued will be then greater than the Company’s “Authorised” Share Capital ie as stated in the Company’s Articles of Association (or Constitution as the case may be) then, before attending to any of the above, we will also need to amend the Articles of Association (or Constitution as the case may be). To amend a Company’s Articles of Association we would need to call a board meeting, create a whole new draft of the Articles of Association then arrange for that draft to be signed and filed with the registry. Cost to attend to all of this would be circa $350 + registry fees.
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
